Smart TV: The industry push to keep getting smarter

For decades we've been watching TV. Now a new generation of televisions is beginning to watch us.

Technological advances are giving the old clunky "boob tube" an I.Q. injection. Some of the new breed of smart TVs comes equipped with facial recognition technology of the kind used by the U.S. Department of Homeland Security, to "see" the images flickering on the screen and suggest new shows based on what you've been watching.

Building on advances pioneered by the video game industry, some of the new TVs change channels with the sweep of the hand. Others allow viewers to ask, "What movies are on tonight?" and get an answer.

Instead of turning on the TV in the morning and finding it tuned to the "Today" show because last night you watched NBC's "The Tonight Show With Jay Leno," you'll see a tile of images presenting options that include shows that you've recorded, shows currently airing and a list of options offered through on-demand services such as Netflix or Amazon Instant Video.

The TV's heightened awareness of your viewing habits might send an Orwellian chill up the spine of some viewers. But manufacturers say they're solving a serious problem for couch potatoes who are inundated with hundreds of programming choices. Some in the consumer electronics industry note the recommendation feature is hardly radical: devices and software have been making suggestions since 1999, when the TiVo digital video recorder started recording shows it assumed its owner might like.

Still, you might say a revolution is brewing in the living room — and this one will be televised. It portends not only a change in the TV viewing experience but also poses a threat to cable and satellite TV distributors. Even network executives' notions about scheduling — how positioning a new show adjacent to a popular program in the evening lineup to drive ratings — look anachronistic at a time when Nielsen estimates that 47% of all American households have DVRs and can watch recorded shows whenever they choose, and 55% of broadband homes have at least one TV connected to the Internet, according to market researcher the Diffusion Group.

Indeed, the television industry is grappling with seismic change. Video consumption is on the rise, but the audience is fragmented as never before. Some 5 million American households now get their entertainment via Internet-connected devices and, notes Nielsen, the majority of these mostly young viewers don't pay a monthly cable or satellite bill. Concerns about how to reach this group known as the "never connecteds" and count their viewing in a show's ratings adds to a list of headaches that include slumping prime-time broadcast TV ratings and the flight of advertisers to cable.

These supercharged TVs may not be for everybody, especially those suffering from gadget fatigue. What's more, these smart TVs may look dated compared with what Silicon Valley giant Intel has in store for later this year, not to mention whatever Apple Inc. is planning with its mysterious but hotly anticipated flat-screen TV.

"We're in a golden era of television. Never in the history of the media has so much money been spent producing high-quality content," said Eric Huggers, general manager of Intel Media, expressing a broad consensus. "If you look at the technology that is used to deliver that, it feels stuck in the past. We think we need to put the technology on a par with the quality of the editorial."

The chip-maker is testing an Internet-connected box that you could buy at the store, connect to the TV and home network and start watching shows within 10 minutes — without the hassle of waiting for a cable or satellite installer to furnish the hardware and programming hook-up. It will come with its own subscription service that will offer local and national programs as well as cable shows, catch-up viewing and access to online movie and TV services. Pricing has not been disclosed.

"This is going to be the first true cable TV replacement service delivered over broadband," said Michael Greeson, president of the Texas-based media research firm the Diffusion Group. "It's going to tell us so much about the television industry and what relationships have been bent or broken in terms of [Intel] being able to bring first-run content ... as opposed to delayed, on-demand."

A greater guide

The television guide — the spreadsheet like grid that lists TV shows according to time and channel — hasn't changed much in format since TV Guide published its first issue in 1953 with Lucille Ball and her son, Desi Arnaz Jr., on its cover. But that's hardly true of the number of choices confronting viewers, who every year are faced with exponentially more entertainment options.

This video overload set the stage for a wave of innovation aimed at improving how people search for and discover shows to watch. The Internet-connected smart TVs that began arriving in stores this spring take a radically different approach. The latest sets from Samsung, Panasonic and others offer a "home screen" customized to reflect individual tastes.

"What we're talking about here is an evolution in terms of guidance," said Stephen White, president of Gracenote, a Bay Area company whose voice and video recognition technology powers many of the new services. "We live in a world where there are so many content choices, we want the content we care about, the actresses we love, the shows we want to see. We're evolving the guide to reflect that."

For now, the devices have an early-adopter patina. The Wall Street Journal's influential personal technology columnist, Walter Mossberg, pronounced the latest crop of sets on display at the Consumer Electronics Show this year "clumsy," adding that their smart TV functions "haven't taken off with consumers yet," but "This may be the year they do."

There's no question that smart TVs are moving from a novelty to the mainstream, with shipments expected to grow 25% worldwide this year, according to NPD DisplaySearch. Some 76 million of these devices are expected to ship globally this year. Prices range from about $525 for a 40-inch Samsung TV to as much as $7,000 for a 65-inch smart TV from Sony that boasts ultra-high resolution.

Panasonic lets up to four family members pick their favorite TV shows and Internet-connected applications, be it YouTube videos, Pandora radio or Facebook. A built-in camera uses facial recognition technology to determine who's sitting on the couch to serve up the most relevant programming.

Samsung's sets monitor the shows you've watched so that when you turn on the TV its "smart hub" presents a curated list of programs — much the way Amazon.com suggests books, movies and other merchandise to buy, based on past purchases. While live TV is playing in one corner of the screen, the Samsung set will present a handful of shows you might like and five or six upcoming programs airing within the next two hours.

Basically, the goal is to allow consumers to spend more time watching TV and less time searching," said Dave Das, Samsung's vice president of home entertainment.

Recommendations, though, are an evolving science. And even the best algorithms can sometimes miscalculate, as one journalist humorously recounted in an article headlined: "If TiVo Thinks You Are Gay, Here's How to Set it Straight." Viewers who are repelled by the notion of their TV playing the role of Big Brother in their living rooms can disable recommendations — or simply program the set to display popular content.

Naturally there are enticing commercial applications beyond just helping the hapless viewer. Yes, dear consumer: The commercials will be targeted as well.

Gracenote is working with several television manufacturers and broadcasters to test a new technology for delivering customized ads into the home. The software incorporates information available through public databases, including credit information, home ownership and car registration data, to help brands deliver targeted messages during commercial breaks.

An automaker such as Ford could air multiple commercials during a single commercial break: with ads for its sporty compact Fusion appearing to the apartment of a single young male, the Flex cross-over vehicle touted to a suburban couples with children, or a Lincoln MKX displayed in affluent households. Such practices are already commonplace online.

Broadcasters and advertisers hope that when the technology is introduced in 2014 it will deliver more relevant advertising so that consumers will be less prone to skip commercials.

"Targeted advertising is a win-win-win," said Jeffrey Cole, director of the University of Southern California's Center for the Digital Future. "It's a win for the media owner, because they can charge [a premium] because of targeting. It's a win for the media buyer, because they're only paying for people who have a demonstrated interest in their product. And it's a double-whammy for the consumer, first because they get advertising that's more relevant and engaging, and second, it subsidizes the content."

At the same time, the privacy implications loom large.

"One of the immediate reactions we get around this is, 'Wow, this is pretty creepy,'' acknowledged White. "The consumer has the ability to say, 'I want this targeting ... or I don't."

"Advertising companies need to be much more open about their profiling practices," said Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington, D.C. "And consumers should have the right to know how information about them is used."

One familiar accessory (when it isn't misplaced) seems destined to go the way of rabbit ears and cathode-ray tubes: the remote control.

Manufacturers like Panasonic already offer applications that convert your tablet computer or smartphone into a TV remote, allowing you to change channels or search the Internet to find that particularly funny "Cat Jump Fail" video and transfer it to the TV screen for the amusement of the entire family.

Increasingly though, TV makers are introducing other ways to interact with the living room screen. Samsung and others offer TVs that respond to gestures and spoken commands. Such advances in search and navigation become increasingly important, as Internet-connected TVs pour a fire-hose of video into the home.

At the moment smart TVs' search capabilities are limited. They fail to reflect the movies and TV shows available through Internet video services such as Netflix, Amazon.com and Hulu. Such over-the-top services, which bypass cable and satellite TV providers, remain locked in programming silos.

That's where Intel comes in. The as-yet-unnamed Intel TV service would deliver a comprehensive video experience that collects all the entertainment options into a single interface. It joins a number of Internet-connected boxes that stream video to the TV screen — including dedicated devices from Roku, Apple and Boxee, video game consoles and Blu-ray players.

Some industry-watchers had hoped that Intel's service would bring about an a la carte alternative to cable or satellite TV, in which subscribers could pick and choose which networks they'll pay for. Sen. John McCain (R-Ariz.) has introduced a bill that would allow consumers to do just that — to pick the channels they want instead of buying a big package of networks; it faces strong industry opposition. Intel may not be what cord-cutters have been dreaming of, but its executives say they would provide smaller, more "interest-based" packages than the established pay TV rivals.

In various ways — predictable and unintended — these devices, together with the rapid adoption of smart TVs, will surely alter the television experience and industry. But probably not as quickly as the TV-tech utopians imagine.

"It's more death by a thousand cuts than 'off with their heads!'" said Mike Vorhaus, who oversees the digital practice of Frank N. Magid Associates media consultants in Los Angeles. "It's going to be creeping. It's going to maybe go back and forth a little bit.... People just don't change their behaviors all that fast."

In two previous posts, I discussed the Amazon pilots, a slate of proposed series by the cyberspace bookseller turned virtual moving-picture studio, now streaming online for viewer comment and ratings. (Thousands have already chimed in.) The first post was for background and context; the...

Amazon's TV "pilots" (see my previous post and this relevant website) come in two flavors: grown up comedies, most of which betray basic-cable (and even premium-cable) values in terms of content and language, and children's shows, which, conversely, are largely aimed at the youngest of the...